We’re in our 60s, retired, have $70K in savings and Social Security of about $4K/month, but with high health care costs. How can we make it?

Unfortunately, older Americans face many big costs — and health care is often one of the biggest. Spending on medical care alone could take up a huge portion of your Social Security benefit, so it's no surprise you're worried about how to cover your care.

Fortunately, you may have some options available. Here's what you should know to try and ensure your money lasts in retirement.

Health care spending is a huge burden on retirees

Most experts suggest capping your annual spending at around 4% of your retirement balance in year one, then making adjustments for inflation going forward.

If you have a nest egg of $70,000, that would mean just $2,800 in income for your first year of retirement.

When combined with your $3,780 monthly Social Security benefit, you'll have around $48,160 per year in total income.

Unfortunately, data from the Federal Reserve reveals average expenditures on health care among those 65 and over total over $8,000 a year (2).

Fidelity also found that a 65-year-old retiring in 2024 needs around $165,000 saved to cover all of their out-of-pocket costs throughout retirement (3), while the Center for Retirement Research warns that only 75% of Social Security benefits remain after paying premiums and out-of-pocket costs for the median retiree (4).

These estimates suggest that, given your current situation, you would pay more than 15% of your income on medical costs alone. That paints a troubling picture.

How to cut costs and cover your medical care

The best way to preserve your nest egg is to do what you can to lower medical care costs so you can use your Social Security benefits and limited savings to pay for other necessities.

MedlinePlus (5) suggests some of the following ways to do just that.

Minimizing your costs

First up, consider shopping around carefully for a Medicare Advantage or Medigap plan to reduce out-of-pocket costs associated with traditional Medicare. While these plans require paying a premium, they can still be cheaper than paying for all coinsurance costs and other services Medicare doesn't cover.

If you’re not sure where to start, Americans under the age of 65 — even those with pre-existing health conditions — can compare rates and features of health insurance policies from providers through U65 Health Insurance.

The process is simple: Enter your ZIP code, age and household income, then within five minutes, U65 will display quotes from providers near you. You can compare policies and coverage by providers — including Aetna, Kaiser, Anthem, Oscar Health and more — all for free, helping you make an informed decision about your future.

Other options include:

• Asking your care provider to switch to generic medicines to keep costs down
• Getting routine health care screenings and focusing on preventative care
• Seeking charity care at non-profit hospitals
• Looking into financial assistance programs that help seniors cover medical and food costs, and arrange transportation to doctor visits.

Making every cent count

As you get closer to retirement, every dollar starts to matter more. Rising health care costs, uncertain markets and a fixed income can make it harder to stretch your savings — especially if you’re trying to plan for decades ahead.

You might also want to consider joining organizations focused on older Americans, like the American Association of Retired Persons (AARP) for discounts on almost everything — from prescriptions and dental plans to travel, entertainment and insurance. But AARP doesn’t just offer money-saving perks. They can also help you make informed financial and health decisions.